Chilean court halts construction work on huge gold mine

AFP, SANTIAGO and NEW YORK

Fri, Apr 12, 2013 - Page 15

A Chilean court suspended construction of what would be one of the world’s biggest gold mines on Wednesday, accepting a complaint filed by indigenous groups on environmental grounds.

The project was launched in 2009 by Canadian mining company Barrick Gold, the world’s largest gold producer, after an initial investment of US$8 billion.

It plans to spend US$8.5 billion more on the unfinished Pascua Lama mine, which straddles the Chile-Argentina border at an altitude of 4,000m, and had hoped to start production next year.

However, local groups have launched a legal battle to halt the plan, citing concerns over possible damage to a river and resulting in Tuesday’s ruling by the Santiago Appeals Court.

The order, which suspends construction of the open-pit mine while the court studies the broader environmental issues, came as crews were still removing earth to create the pit from which gold and silver would be extracted.

The complaint was filed by the indigenous Diaguita people in northern Chile.

It said that the construction work “has generated a situation of imminent environmental danger” for the glacier-fed Estrecho River.

Lorenzo Soto, a lawyer for the native people, said damage being caused by the mine construction was massive.

He said regulators had found that the glaciers at the source of the Estrecho were now covered in dust from the mine excavation, and that Barrick Gold had failed to prevent it as required.

“The glaciers are covered, which generates damage by producing a phenomenon of accelerating melting,” Soto said.

Chilean Interior Minister Andres Chadwick said he was not surprised by the court decision, and welcomed the idea of suspending the project while Barrick ensures it is complying with all environmental protection terms set by the government.

Barrick Gold said it was suspending work on the Chilean side of the border while it works to satisfy the environmental and regulatory requirements to the satisfaction of the Chilean authorities.

Separately, US oil giant ConocoPhillips on Wednesday announced it is suspending its offshore Alaska drilling program in the Alaskan Arctic due to changing regulations.

Two months after a similar move by Shell, ConocoPhillips cited “evolving” federal regulatory requirements in putting on hold its exploration drilling plans in the Chukchi Sea on Alaska’s northern coast.

“While we are confident in our own expertise and ability to safely conduct offshore Arctic operations, we believe that more time is needed to ensure that all regulatory stakeholders are aligned,” ConocoPhillips Alaska president Trond-Erik Johansen said in a statement.

A ConocoPhillips spokeswoman said the company had faced changing standards in the permitting process for the Chukchi Sea.

The company will continue to work in the onshore National Petroleum Reserve adjacent to the Chuckchi Sea, she said, where permitting standards are “generally stable.”

Conoco had planned to drill its first Chukchi well next year.

The retreat follows a similar move by Anglo-Dutch giant Shell, which in February suspended its drilling plans in the Alaskan Arctic through this year, following multiple embarrassing problems with its two drilling rigs.